The war on terror has been a boon to the British intelligence services. After decades in which they became notorious for "counter-subversion" operations against political activists and trade unionists, colluding with death squads in Northern Ireland and helping the US to overthrow elected governments around the world, the spooks have at last had a chance to play the good guys.

Instead of the seedy anti-democratic gang that plotted against a Labour prime minister, they can claim to be the first line of defence against indiscriminate attacks on the streets of Britain. MI5 has well over doubled in size in the past 10 years. Glamorised beyond parody in TV dramas such as Spooks, the spying agencies' uncheckable pronouncements about their exploits and supposed triumphs are routinely relayed by the media as fact. The same has been true in the US, but on a far larger canvas.

So faced with the avalanche of leaks from the National Security Agency and GCHQ about the epic scale of their blanket electronic surveillance, both at home and abroad, the masters of Anglo-American espionage have played the "national security" card for all it's worth. The revelations of NSA contractor Edward Snowden in the Guardian have been a "gift" to terrorists, the head of MI5 Andrew Parker claimed, eagerly supported by the prime minister. The leaks were the "most catastrophic loss to British intelligence ever", insisted David Omand, the former head of GCHQ. They were cheered on by the trusties of the British press – a fertile recruiting ground for British intelligence and the CIA over many years. National security has been imperilled, they all warned, as Tory demands for the Guardian to be prosecuted have grown.

In reality, national security is a catchphrase so elastic as to be meaningless. As MI5 helpfully explains, government policy is "not to define the term, in order to retain the flexibility ... to adapt to changing circumstances" – in other words, political expediency.

If it simply meant protecting citizens from bombs on buses and trains, of course, most people would sign up for that. But as the Snowden leaks have moved from capability to content, it's been driven home that much of what NSA and GCHQ (virtually one organisation) are up to has nothing to do with terrorism or security at all, but, as might be expected, the exercise of naked state power to gain political and economic advantage.

In the past few days the French have discovered (courtesy of Le Monde) that the NSA harvested 70m digital communications in France in one month, with special focus on French-American telecoms firm Alcatel-Lucent, while the Mexicans have learned (via Der Spiegel) that their president's emails were hacked into by US intelligence to "plan international investments" and strengthen US diplomatic leverage.

Something similar happened to Brazil's president Dilma Rousseff, just as world leaders were targeted at the G20, while India and Germany were among other countries treated to the full electronic harvest treatment. Terrorism was clearly well down the priority list.

The protests of French and other western governments, which of course have their own, less effective espionage capability and collude with the US across the board, are largely for public consumption. France was among several European states that cravenly bowed to US pressure to force the Bolivian president Evo Morales's aircraft to land this summer, in a hamfisted attempt to kidnap the elusive whistleblower Snowden.

But it is the scale and reach of the NSA-GCHQ operation – and the effective global empire it is used to police – that sets it apart. And when it comes to terrorism, the evidence is that the US and British intelligence agencies are fuelling it as much as fighting it.

Take drone attacks, which are Obama's weapon of choice in the new phase of the war on terror. They are reckoned to have killed up to 3,613 (926 of them civilians, including 200 children) in Pakistan alone. Amnesty International this week argued that US officials should stand trial over evidence of war crimes in the Pakistan drone campaign. Human Rights Watch has made a similar case over the slaughter in Yemen.

The drone war is run by the CIA and US military. But, as the Snowden leaks confirm (this time in the Washington Post), the NSA is intimately involved in what are often anything but "targeted killings" – as is GCHQ, now facing legal action in London over war crimes brought by the son of a Pakistani victim of a 2011 drone attack. Drones have, as the New York Times put it, "replaced Guantánamo as the recruiting tool of choice for militants", cited as justification by jihadists for attacks on western cities.

The same goes for the role of US and British intelligence, serviced by the NSA and GCHQ, in a decade of torture and state kidnapping. As the evidence of MI5 and MI6 complicity with CIA black sites, "extraordinary rendition", waterboarding and genital mutilation has built up – from Bagram to Guantánamo, Pakistan to Morocco – court case has followed police investigation. You might call it a recruitment "gift" to al-Qaida. But neither the agencies nor the politicians supposed to supervise them have yet been held to account.

Meanwhile, despite its multiple failures, the war on terror keeps expanding, spreading terror as it goes. The new front is Africa, where the US military is now involved in 49 out of 54 states. Two years after what was supposed to have been a successful intervention in Libya, the country is again on the brink of a new civil war, its prime minister begging to be rescued from the backlash over another US kidnapping.

It's a democratic necessity that the Snowden leaks are used to bring some genuine accountability to the NSA-GCHQ machine and its lawless industrial-scale espionage. But to frame the controversy as a trade-off between security and privacy misses the wider picture. The main western intelligence agencies are instruments of global dominance, whose role in the rest of the world has a direct impact on their own citizens. It's not the revelations that threaten our security, but the agencies and their political masters themselves.